Stanbic Bank laid off 88 staff members during its voluntary early retirement (VER) with the program costing the back sh. 773.2 million.
The one-time layoff costs have subsequently trimmed the bank’s profit for the first nine month of the year even as earnings for the period picked up by 8.5 percent to Ksh.5.1 billion.
Stanbic accepted the early retirement of part of its staff in a rationalization move which brought its employee base down to 1000.
The non-coercive approach had been targeted at workers aged 50 and over and mainly touched on middle and top management staff as mirrored in the hefty send-off package which included bonuses for years worked and a 25 percent loan discount on outstanding loan balances to the lender by the departed staff members.
The bank’s financial position, however, remains solid supported by continued increases to both interest and non-interest funded income (NFI).
Stanbic’s net interest income in the period peaked at a higher 13 percent having grown from a lower base Ksh.8.5 billion on the back of greater loan issuance to customers and improved deposit mobilization from clients.
The voluntary early retirement program meanwhile paid dividends for the lender with staff costs being maintained at Ksh.4.3 billion to represent a marginal rise of 2.34 percent from the corresponding remuneration spend in 2018.
Nevertheless, Stanbic asset quality deteriorated across the review period with net non-performing loans surging forward by 86 percent to Ksh.7.8 billion in spite of increased loan-loss provisioning to Ksh.1.7 billion.
The shareholders earnings per share (EPS) has however surged to Ksh.29.93 from Ksh.27.75 in the last year.
Stanbic has however omitted the declaration of a dividend for the financial review period.